When deciding to sell their house on the open market, most people tend to only think about the commission fee they’ll have to pay their real estate agent. While that is an important part of the sales process, it’s merely one piece in a much larger real estate transaction that includes lots of fees, taxes, and costs. In fact, by the time you finally sell your house, it’s reasonable to assume see you’ll accumulate costs equal to around ten percent of the final home sale price.
So if you’re planning on selling your home, whether it’s in Arkansas or anywhere else, we’ve made a handy list of all the potential costs that you’ll need to be aware of. You might not have to pay each of them, and the amount will vary, but you’ll probably have to consider most of them. Once you have a better idea of what the overall costs might be, you’ll know if it feels worth it to sell on the open market or whether it might save you a lot of time and headaches to sell your house as-is to a real estate investor.
How Much Does It Cost To Sell Your Home In Arkansas?
Part 1: Preparation
Before your house is even listed, you have to make sure it’s in the best possible condition to ensure that potential buyers will be interested and want to make an offer. While we’re sure you’ve done a great job keeping your house as you like it, it’s still probably going to need a little help to get it into “sale condition.” There are four areas that you’ll want to consider spending money in order to make for the best first impression.
Your idea of the ideal home probably isn’t the same as what other people think. That doesn’t mean that you have to get rid of all your furniture but it does mean you might want to consider how you can make your place look more appealing to a wide audience. Remember, buyers will want to see what it would look like for them to live there.
This is where a home staging company can help by rearranging your home with an eye towards making it as appealing as possible to buyers. They might rearrange what is there or they may bring in new furniture as well. Costs vary but they often range anywhere between $2,000 and $3,500 for a quality stager. It’s a lot of money but, according to a National Association of Realtors (NAR) survey, 50 percent of sellers agents said staging increases the value of a home on the market.
Getting your house ready to sell doesn’t just mean working on the interiors. It also means making sure it looks great before people ever set foot inside. Curb appeal is critical when selling a home on the open market and you only get one chance at a first impression. So you want to make sure the lawn is mowed, weeds are pulled, flowers are planted, and gardens are tended. While you can do this yourself, professionals can usually do it better. Depending on what you need to be done you’re looking at anywhere between a couple hundred to a few thousand dollars.
Even if you’ve kept up with your house over the years, wear and tear mean there’s likely something you’ll need to upgrade or fix. It was okay to put these things off when you lived there, but not as much when someone else is looking to buy your home. You’ll have to pay for a pre-inspection report in order to identify any potential repairs or damage spots. Hopefully, you’re just looking at cheap fixes, but sometimes you find out about water, mold, or termite damage you didn’t know about. Either way, you’ll be clear about what needs to be done and can get cost estimates from professionals.
Improvements & Upgrades
Fixing what’s broken is paramount but you might also want to take this opportunity to make some improvements or upgrades before listing. Doing so increases the value of your home. This does mean you’ll be putting up money that you have no guarantee of recouping, but a competitive housing market demands that you do what you can to make your home stand out.
Part 2: Negotiation
Your home is listed and you’ve paid the initial costs to get it squared away. Now you’re starting to get see some offers roll in. While that’s good news, you’re now ready for the next phase of the process, which comes with a bunch of costs of its own.
Agent Commission Cost
If you use a real estate agent or Realtor to help sell your home, they will get a commission fee for their work. Agents usually end up getting a commission fee of 5-6% of the final sale price.
If your house sells for $300,000, the agent is going to get $15,000 to $18,000 as the fee, which they then split with the buyer’s agent. That’s a big chunk, even if your home sale price is much smaller than that. You could sell the home yourself but you’d still have to pay a commission for the buyer’s agent, which is typically half of that overall commission (and you’ll have to negotiate that).
It’s also worth pointing out that there’s a way to avoid all of these costs. You can also ask for a competitive cash offer from a real estate investment company like 365 Property Buyers. They’ll make you a quick offer and can close on the house very quickly, cutting down any further cost potential that comes with your house sitting on the market for months. This option can be beneficial if there are any major concerns about your house or if you’re relocating quickly.
While not technically a “cost,” seller concessions are often a big part of the negotiation process and will have a big impact on your profits. Depending on the strength of the market and the value of offers you have, you may end up having to cover any inspection fees, processing fees, or title costs. This also includes any negotiations about the overall price, how the home will be paid for, and any other alterations to the initial deal. It’s impossible to give you specific costs on concessions as each transaction differs, but it can be expected that concessions will eat roughly 1-2% into your overall profits.
Part 3: The Deal
The buyer has finally agreed to the final terms and you’re ready to sell. You’re not done yet, however, as there are a few more costs to consider.
Closing costs can be a lot of different things depending on your state and local laws. However, it’s pretty consistent that you’ll have to consider insurance fees, appraisal fees, property survey fees, credit report fees, transfer taxes, and title fees. There are also specific situations that call for other costs before closing, including loan payoff costs, mortgage prepayment penalties, and unpaid HOA dues.
Also, if you’re going to sell a Arkansas House on the open market, the bad news is that closing costs here are among the highest in the nation. There are a lot of factors involved, but if you’re going to sell a house for $200,000, there are likely to be $2,000-3,000 in closing costs split between the buyer and seller.